Pennsy lawmakers need business help on Medicaid

June 16, 2005

Faced with the prospect of $500 million in state Medicaid cuts, the Pennsylvania House members voted "no" and said they would find alternative methods of financing the program.

We hope so. As it stands now, Medicaid is the fastest growing item in the state's budget. Without a new revenue source, the only alternative is cutting the program.

Pennsylvania's budget for the next fiscal year is due by July 1, so any solution will have to be crafted quickly. Based on what we've heard so far, we're not optimistic.

Gov. Ed Rendell's proposal would have hit his $500 million target by limiting payments to medical providers and curtailing services to Medicaid's sickest patients.


Under Rendell's plan, those patients would be limited to two hospitalizations a year and six prescription drugs per month.

How would opponents of the cuts fund the program?

The most reasonable proposal for the short term would be to move money from other programs. There is also a proposal for an audit of the program, to see whether it is delivering services in the most efficient ways possible..

Rendell's proposal did not include tightening restrictions for eligibility, even though administration officials said this week that the system will enroll 100,000 new patients in the next year.

As health-care costs continue to climb, the danger for Pennsylvania, and all states, for that matter, is that businesses will drop employee health coverage, pushing more people onto the Medicaid rolls.

As the Legislature ponders what can be done, we suggest that one of the possibilities that deserves some serious scrutiny is providing incentives for businesses to offer at least a basic health-insurance policy.

Employees who have health-care benefits are more likely to stay with a company than those who don't.

The National Federation of Independent Business has a variety of proposals to assist business, including tax credits for companies that provide health insurance, a new federal law that would allow businesses to band together across state line to get better deals on coverage and health savings accounts.

Instead of having the state spend more, why not give business incentives to help out?

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